Cisco Announces Streamlined Operating Model

Reorganization of Key Functions Enhances Customer Focus; Simplifies Operations

SAN JOSE, Calif. – May 5, 2011 – Cisco today announced significant changes to its business structure and operations. The company will streamline its sales, services and engineering organizations as it focuses on the five areas driving the growth of networks and the Internet: core – routing, switching, and services; collaboration; data center virtualization and cloud; video; and architectures for business transformation. These changes are in line with Cisco’s mission to improve the customer, partner and employee experience; simplify its operating model and create greater focus on the five priority areas.

“Cisco has driven transformational change before, and we are again transitioning to the next stage of the company’s evolution,” said Cisco Chairman and CEO John Chambers.  “Today, the market is driving toward simplification and it’s why the network matters.  Our role as the leading network platform provider is strong, we have great customers, talent and expertise—and we know how to bring innovation to every aspect of the network.  It’s time to simplify the way we execute our strategy, and today’s announcement is a key step forward.”

The changes announced today include:

• Worldwide Field Operations will now be organized into three geographic regions, to drive faster decision making with greater accountability and alignment.  These regions include the Americas (U.S., Canada, and Latin America); Europe, Middle East and Africa; and Asia Pacific/Japan/Greater China.  While the business will continue to be primarily managed by geographic regions, the organization will continue its focus on key customer segments and partners, with dedicated teams for Enterprise including large enterprise, public sector, commercial and small businesses, Service Provider, and Cisco Partners. Executive vice president Robert Lloyd will continue to lead the worldwide field operations and sales organization.
• Cisco Services will organize around key customer segments and delivery models in alignment with Field Operations.  Gary Moore, executive vice president and chief operating officer, will continue as leader of the services organization, in addition to his duties as COO.
• Cisco Engineering will organize functionally to drive technology innovation, accountability and alignment across all five company priority areas.  Senior vice president Pankaj Patel and senior vice president Padmasree Warrior will now co-lead the engineering organization.  Within engineering, a dedicated Emerging Business Group will focus on select early-phase businesses and will be led by senior vice president Marthin De Beer, with continued focus on integrating the Medianet architecture for video across the company. The engineering organization under Patel and Warrior will continue to report to Gary Moore, COO.
• Cisco will refine its cross-functional Council structure to three councils that reinforce consistent and globally-aligned customer focus and speed to market across major areas of the business:  Enterprise, Service Provider and Emerging Countries.  These councils will serve to further strengthen the connection between strategy and execution across functional groups. Resource allocation and profitability targets will move to the sales and engineering leadership teams which will have accountability and direct responsibility for business results.

“Cisco is focused on making a series of changes throughout the next quarter and as we enter the new fiscal year that will make it easier to work for and with Cisco, as we focus our portfolio, simplify operations and manage expenses,” said Gary Moore, COO.  “Our five company priorities are for a reason—they are the five drivers of the future of the network, and they define what our customers know Cisco is uniquely able to provide for their business success. The new operating model will enable Cisco to execute on the significant market opportunities of the network and empower our sales, service and engineering organizations.”

The majority of these changes will take place over the next 120 days, with the new Sales organization in place at the start of Cisco’s fiscal 2012 (July 31, 2011).

Forward-Looking Statements

This press release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the company’s plan to change its business structure and operations, including the reorganization of Cisco’s sales, services and engineering organizations and refinement of its council structure; Cisco’s priorities as drivers of the network; and Cisco’s new operating model enabling the company to execute on opportunities and empower the company’s organizations.  Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including, among other things, how well we execute on our strategy and operating plans, business and economic conditions and growth trends in the networking industry, customer markets and various geographic regions, global economic conditions and uncertainties in the geopolitical environment and other risk factors set forth in Cisco’s most recent reports on Form 10-K and Form 10-Q. Any forward-looking statements in this release are based on limited information currently available to Cisco, which is subject to change, and Cisco will not necessarily update the information.

About Cisco

Cisco, (NASDAQ:CSCO, news, filings), is the worldwide leader in networking that transforms how people connect, communicate and collaborate.  Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

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